Baillie Gifford rolls out tokenised fixed income fund in Singapore

Baillie Gifford has opened up its tokenised fixed income fund to eligible investors in Singapore.

The Baillie Gifford Enhanced Yield Fund (BAGEY) is an actively managed short-duration bond strategy and a fully native tokenised fund.

Unlike other structures in the market that use a wrapper on an existing fund, BAGEY issues investors with tokens – currently through Ethereum – and the blockchain forms the legal source of truth for ownership.

BAGEY is a US dollar-denominated, UK-regulated OEIC investing in government and corporate bonds. It currently offers a yield of around 7% in US dollars with around two years’ duration and an average credit quality of BBB.

Calvin Liew, Baillie Gifford’s client director in Singapore, said: "Singapore is a natural market for the BAGEY fund. Investors here are sophisticated, internationally minded and already thinking seriously about how tokenisation can be used in investment markets.

“BAGEY gives investors access to something different: an actively managed fixed income strategy, targeting an attractive yield, through an investment built natively onchain from the outset.”

Sandy Jones, director of digital assets at Baillie Gifford, added: "For us, tokenisation is most compelling when it makes an investment product more useful. BAGEY’s native architecture allows us to build for faster settlement, greater transparency and, over time, greater interoperability across digital financial markets.

“Money market funds proved that regulated investments can operate onchain. We think the next step is showing that the same infrastructure can carry actively managed investment strategies."